ABSTRACT The blood-brain barrier (BBB) acts as a signaling and transport interface between the blood and brain. The BBB begins to form early in embryonic development as the mesoderm-derived vasculature invades the immature central nervous system (CNS) and acquires BBB characteristics such as tight junctions and a lack of fenestrae. After further maturation, the adult BBB, with its very low permeability and a wealth of molecular transport systems, is maintained by interactions with supporting cells of the neurovascular unit (NVU). Recent studies have indicated the importance of CNS pericytes in BBB formation, with pericytes triggering reduced transcytosis, reduced expression of leukocyte adhesion molecules and proper tight junction organization. However, the identity of pericyte-derived factors that can elicit these important changes during BBB formation are not known. Thus, our understanding of the molecular mechanisms underpinning BBB formation is incomplete; and in this proposal, we aim to further examine the mechanisms by which brain pericytes impact BBB formation. A powerful and innovative approach to explore BBB formation is the use of human induced pluripotent stem cell (iPSC) technology to model the BBB and the associated support cells of the NVU. We will demonstrate that not only can brain pericytes be differentiated from iPSCs, they can also regulate key BBB properties in iPSC-derived brain endothelial cells (BMECs). In parallel, using genomics approaches, we have identified a cohort of pericyte-derived secreted factors, several of which can induce BBB properties in iPSC- derived BMECs. Combining these approaches, we will examine the mechanisms whereby pericyte-derived secreted factors can differentially regulate BBB formation in iPSC-derived BMECs. Preliminary data indicate that one of the pericyte-derived secreted factors, BMP5, can influence hallmark BBB properties known to be regulated by brain pericytes. Namely, BMP5 can reduce transcytosis and improve tight junction structures in iPSC-derived BMECs. To further examine the mechanism by which BMP5 regulates BBB formation during development, we will use genetic mouse models to explore whether BMP5 signaling is necessary for BBB formation and function. Finally, we will assess whether BMP5 supplementation can be therapeutic in a mouse model of multiple sclerosis. Understanding the pericyte-derived regulators of BBB formation could yield many new mechanistic insights regarding brain diseases that have demonstrable pericyte involvement. Knowledge of the barrier formation pathways could also open new avenues for restoring BBB function in debilitating neurological disease.